2 masses attached with a spring falling

1. The problem statement, all variables and given/known data
2 balls, each of mass M, are attached to each other by a spring with constant k.
they hanged out by a rope, so they are in equilibrium, the rope was cut and they fall.
do they Oscillate?

3. The attempt at a solution
now my opinion is split here, from 1 point of view they both fall with acceleration g, so they shouldn't oscillate (that's based on logic) its like throwing a bottle with a hole in it, and no water will come out of the bottle , but on the other hand,the spring was stretched initially, and if m falls with acceleration g, the net force on it should be Fnet=mg, but in this case it's not, the spring is stretched so there is a force upwards(looking at the lower mass) and mg down , so what's the answer, will it?
thanks!

When it is cut what displacement from the new equilibrium point are the weights from each other?

first, the equilibrium point will be when the spring is not stretched at all right?(when its cut i mean)
so the displacement is the Xo which is mg/k imo, the initial stretch .
but the displacement of each mass is different? :S so its mg/2k
Am I right?
I'll wait for your answers, If the above is true I think I can solve it using reduced mass :X

wait,
when both mass hang on a rope, they are in equilibrium :S no? so there is no displacement from equilibrium.
or did you mean to ask if the spring stretched?
so the equilibrium point changes, thus it's not in equilibrium anymore ,so it should oscillate ? no?
ty

wait,
when both mass hang on a rope, they are in equilibrium :S no? so there is no displacement from equilibrium.
or did you mean to ask if the spring stretched?
so the equilibrium point changes, thus it's not in equilibrium anymore ,so it should oscillate ? no?
ty

Yes it should oscillate.

I expanded what I posted in the previous post a bit, which I guess you missed.